By Stephen Herzenberg

The Trump administration’s freeze on federal funding has evolved into a systematic dismantling of critical clean energy and climate programs through budget reconciliation.

While claiming to cut $6.5 billion in funding, the Republican-led effort threatens to completely repeal several key initiatives, including the Greenhouse Gas Reduction Fund, Climate Pollution Reduction Grants, and the Department of Energy Loan Programs Office.

Their recently unveiled reconciliation bill, set for consideration in the House Energy and Commerce Committee, undermines environmental protection through multiple concerning mechanisms.

First, it creates a dangerous precedent by allowing natural gas pipeline projects to bypass normal permitting processes with a $10 million fee, effectively institutionalizing a “pay-to-play” system.

Second, it attempts to repeal both NHTSA’s Corporate Average Fuel Economy standards and EPA’s greenhouse gas emissions standards for vehicles, despite these standards being crucial for meeting our climate commitments.

Third, it eliminates DOE loan programs that have demonstrated clear financial success, having generated $5 billion in taxpayer profits through interest payments.

The policy uncertainty created by these actions ripples throughout the economy. When businesses can’t rely on consistent regulatory frameworks or funding mechanisms, they become hesitant to make the substantial long-term investments needed for clean energy transformation. This affects everything from utility-scale solar projects to electric vehicle manufacturing facilities.

The Department of Energy’s Loan Programs Office cuts are particularly shortsighted. The proposed elimination would slash $9 billion across various programs: $3 billion from clean energy and industrial transformation initiatives, $1.5 billion from advanced vehicle manufacturing, and $4.5 billion from energy infrastructure financing. This office has been instrumental in launching successful companies like Tesla and supporting critical infrastructure modernization.

Looking at specific impacts, according to an August 2024 report, over 6,000 utility-scale clean energy projects are eligible for labor standards tax credits. These projects represent 3.9 million potential jobs, over $2 trillion in investment, and over 1 million megawatts of clean power – all of which would be jeopardized by these cuts.

The effects on consumers would be immediate and severe. Utility CEOs have confirmed that current incentives significantly lower energy costs. Without these programs, monthly household energy bills could spike by 10-22% depending on the state. This increase would hit working families particularly hard, especially in regions with extreme weather conditions requiring substantial heating or cooling.

The labor implications are equally concerning. Current federal investments support union jobs through prevailing wage requirements and apprenticeship programs. Projects meeting these standards receive enhanced tax credits, creating a powerful incentive for high-quality job creation. Eliminating these incentives would not only reduce job quantity but job quality as well.

Perhaps most worryingly, these cuts would significantly hamper America’s competitive position in the global clean energy race. As other nations, particularly China, continue aggressive investment in renewable energy, energy storage, and advanced manufacturing, the U.S. risks falling behind. This isn’t just about environmental leadership – it’s about economic security and technological sovereignty.

Pursuing clean energy investments will lead to more stability and lower prices—federal freezes on investments will do the exact opposite.

Clean energy like wind, solar, and electric vehicles are now a critical part of the American economy, creating jobs that often don’t require a four-year degree. Since the clean energy plan was signed into law in August 2022, companies have announced or advanced 751 new clean energy projects, creating 406,007 new jobs and driving $422 billion in new investments across 48 states and Puerto Rico, including 19 new clean energy projects right here in Pennsylvania, prompting $1.33 billion in investment across the Commonwealth.

Most Congressional districts are benefiting, Republican ones even more than Democratic. A report from ReImagine Appalachia and Keystone Research earlier this month finds that, in Pennsylvania, Ohio, West Virginia, and Kentucky, another $24 billion in expected investments in the pipeline will go mostly to Republican districts.

The path forward requires maintaining and strengthening our commitment to clean energy transformation, not abandoning it. The programs currently under threat have demonstrated their value through job creation, consumer savings, and technological advancement, and the people in communities benefiting from them are ready to work together with policymakers towards solutions that work. Dismantling those programs now would not only reverse years of progress but potentially lock in decades of increased emissions and lost economic opportunities.

Stephen Herzenberg is Executive Director of the Keystone Research Center.